West Virginia governor’s coal firm sued over $1M settlement

March 30, 2018

CHARLESTON, W.Va. (AP) — A coal company owned by West Virginia Gov. Jim Justice is being sued for not paying $1 million in a settlement agreement.

Chapter 11 bankruptcy filings submitted this week by Dennis Ray Johnson II accuse Kentucky Fuel Corp. of paying only a portion of a $2 million settlement. The Wednesday filing says the company paid half up front and was supposed to pay the second half in monthly installments of $50,000.

The lawsuit by Peoples Bank says Kentucky Fuel still owes $950,000 and hasn’t made a payment since May 2015.

The Charleston Gazette-Mail reports the lawsuit stems from a 2014 lawsuit Kentucky Fuel settled in 2015 in which two companies accused it of not upholding a coal transaction and other infractions.

Those two companies were Producers Coal and Moussie Processing. Peoples Bank is an Ohio company that took on their credit.

Producers Coal had sued Kentucky Fuel for not delivering the amount of coal defined in a purchase agreement. Moussie Processing had leased a coal processing plant to Kentucky Fuel for a flat flee coupled with a percentage of coal sales. Moussie Processing’s lawsuit accused Kentucky Fuel of not paying for loaded or processed coal.

Moussie Processing’s lawsuit also said it was receiving threatening communication from Kentucky Fuel.

The Gazette-Mail reports that it could not reach for comment a lawyer with Peoples Bank or a Kentucky Fuel representative.